esterday brought the latest Producer Price Index (PPI) measure of inflation. Today, the focus shifts to consumer inflation.
The U.S. Bureau of Labor Statistics released the August 2026 Consumer Price Index (CPI) report, showing headline consumer inflation rising 0.4% in August on a seasonally adjusted basis and increasing 3.4% over the past 12 months.
Core inflation, which excludes volatile food and energy prices, rose 0.3% for the month. That was hotter than expected and is particularly important when viewed alongside yesterday’s PPI report.
The Diesel Problem
Historically, the Federal Reserve has placed considerable emphasis on core inflation because food and energy prices can be highly volatile. The logic is straightforward: temporary energy-price spikes can distort the underlying inflation trend.
But this energy shock is different.
The problem is diesel.
According to the latest BLS PPI data, the price of diesel fuel jumped an extraordinary 24.1% in August alone. BLS reported that more than one-third of the August increase in final-demand goods was attributable to diesel, while nearly two-thirds of the increase in processed goods for intermediate demand was also attributable to the 24.1% surge in diesel prices.
This is not simply a higher price at the pump for people who drive diesel vehicles. Diesel is embedded throughout the economy.
Trucks move food, consumer products, construction materials, manufactured goods, and virtually everything else through the nation’s supply chain. Diesel also powers agricultural machinery, construction equipment, mining equipment, generators, and other industrial machinery.
When diesel prices rise sharply and remain elevated, the increased cost of transportation and production eventually works its way into the prices consumers pay.
Why “Core” Inflation May Miss the Coming Shock
Energy is normally removed from core inflation because energy prices are volatile.
But removing energy from the calculation does not make its economic effects disappear.
A prolonged energy shock can become a supply-chain shock.
That distinction matters.
If gasoline or diesel prices briefly spike and then fall, businesses may absorb some of the increase. But if fuel costs remain elevated, businesses eventually have to recover those higher costs through higher prices for their products and services.
That means today’s diesel inflation can become tomorrow’s food inflation, transportation inflation, construction inflation, manufacturing inflation, and service inflation.
In other words, the energy shock can migrate into core inflation.
This is why the current situation deserves particular attention. The 24.1% monthly increase in diesel prices reported by BLS is large enough to create significant downstream pressure throughout the economy.
$6 Diesel Changes the Equation
Diesel prices have also reached extraordinary levels at the retail pump.
AAA data reported in early September showed the national diesel price approaching the $6-per-gallon threshold, with some markets already reaching or exceeding that level. In several markets, diesel prices were more than 60% above year-earlier levels.
That is a massive increase in one of the economy’s most important transportation and production inputs.
And there is another problem approaching.
Heating Oil Season Is Coming
Northern Hemisphere heating season is about to begin.
Heating oil and diesel are closely related middle-distillate petroleum products and compete for refinery capacity. BLS’s August PPI report also showed a substantial increase in home heating oil and distillates.
That means the diesel shock is arriving just as seasonal demand for heating fuel begins to increase.
For households in the Northeast and other regions that rely on heating oil, this could become a direct household expense. For everyone else, higher heating and transportation costs can still work their way through the prices of goods and services.
Yesterday’s PPI May Be Today’s Warning
The sequence of the data is important.
Yesterday’s PPI showed an enormous producer-level shock concentrated in energy, particularly diesel.
The critical question is not simply whether headline CPI is 3.4% or whether core inflation is 0.3% for the month.
The bigger question is what happens when a massive energy-cost shock persists long enough to propagate through the entire economy.
Core inflation may initially appear relatively contained because energy is excluded from its calculation.
But the economy cannot exclude energy from its production and transportation costs.
Eventually, somebody pays the diesel bill.
And increasingly, that somebody is the consumer.
The current inflation story therefore may not be about an isolated spike in energy prices. It may be the beginning of an inflationary transmission process—from diesel, to producers, to transportation, to supply chains, and ultimately to consumer prices.
How Fiscal Policy Is Becoming a Driving Force of Inflation
The U.S. Bureau of Labor Statistics (BLS) released its August 2026 Producer Price Index (PPI) report on September 10, revealing a renewed acceleration in wholesale prices. According to the report, headline PPI rose 0.4 percent month over month and climbed 5.4 percent over the year, with a significant increase in final-demand goods helping drive the advance. The PPI measures prices received by domestic producers and therefore provides an early look at price pressures moving through the production and distribution system.
The important question is not simply why did producer prices rise this month? It is a larger question:
Why does inflation continue to find fuel in an economy that has already experienced years of elevated prices?
One increasingly important answer is fiscal policy.
Inflation is not produced by a single variable. Energy prices, tariffs, supply disruptions, wages, housing costs, commodity prices, exchange rates, expectations, and monetary policy can all affect the price level. But fiscal policy determines another fundamental component of the inflation equation: how much purchasing power the government injects into the economy relative to the economy’s ability to supply goods and services.
When government spending persistently exceeds government revenues, the resulting deficit represents a substantial fiscal impulse. That impulse can support economic activity—and that is sometimes exactly what policymakers intend. But if demand is already strong, additional fiscal stimulus can also intensify competition for labor, materials, transportation, construction capacity, housing, and other scarce resources.
In other words:
Fiscal policy can become an inflation engine.
The Government Is Part of Aggregate Demand
It is easy to think of inflation as something caused primarily by consumers spending too much money.
But consumers are only one component of aggregate demand.
Businesses spend. Consumers spend. State and local governments spend. And the federal government spends.
The Federal Reserve defines aggregate demand as the combined demand for goods and services from households, businesses, and governments. Government purchases therefore enter the economy alongside private consumption and investment.
That matters because a government does not need to increase taxes to spend more money.
It can borrow.
When federal expenditures exceed federal revenues, the government finances the difference through borrowing. The resulting deficit does not automatically create inflation—particularly when the economy has substantial unused capacity. But persistent, large deficits can become inflationary when they add demand faster than the economy can expand its real supply of goods and services.
The distinction is crucial:
Deficit spending is not synonymous with inflation.
But under the right—or wrong—economic conditions, deficit spending can be an important source of inflationary pressure.
America’s Fiscal Imbalance Is Enormous
The scale of current federal deficits makes this more than an abstract theoretical issue.
The Congressional Budget Office estimated in August that the federal government had accumulated a $1.8 trillion deficit during the first ten months of fiscal year 2026. During that period, federal revenues increased by about 3 percent while outlays increased by about 5 percent. CBO subsequently estimated that the full-year 2026 deficit would reach approximately $2.1 trillion.
CBO’s longer-term projections similarly show deficits remaining historically large. Its February baseline projected a 2026 deficit of $1.9 trillion, equivalent to 5.8 percent of GDP, compared with a 50-year historical average deficit of 3.8 percent of GDP. Federal outlays were projected at 23.3 percent of GDP, substantially above their 50-year average of 21.2 percent.
That is a fiscal environment in which policymakers need to take seriously the possibility that government demand is contributing to persistent price pressure.
And there is another complication.
Fiscal Policy and Monetary Policy Can Pull in Opposite Directions
The Federal Reserve controls monetary policy. Congress and the Administration control fiscal policy.
These are different policy levers, but they interact.
The Federal Reserve explicitly notes that fiscal policy affects the economic outlook and that the Fed considers current and projected fiscal policy when determining the appropriate stance of monetary policy.
Consider the policy feedback:
Government spends more → aggregate demand increases → resource competition increases → prices rise → inflation persists → Federal Reserve faces greater pressure to maintain restrictive monetary policy.
This can create a peculiar policy conflict.
Fiscal policy may be pushing demand upward at the same time monetary policy is attempting to restrain demand.
The Fed can raise interest rates to cool borrowing, investment, housing, and consumption. But monetary policy cannot directly decide how much Congress spends or how much revenue the federal government collects.
Consequently, monetary policy can be forced to compensate for fiscal policy.
That is an important reason why blaming the Federal Reserve alone for inflation can miss half of the equation.
The Fiscal Multiplier Matters
Government spending does not necessarily have a one-for-one effect on economic activity.
Money spent by the government becomes income for someone else. That recipient spends some of it, creating income for another person or business, which can generate another round of spending.
This is the basic idea behind the fiscal multiplier.
When the economy has substantial unused capacity, that multiplier can increase real output without producing an equivalent increase in prices.
But when the economy is operating close to capacity, the same additional demand can produce a different result.
There may simply not be enough additional workers, factories, trucks, construction crews, housing, electricity, raw materials, or other productive resources available to satisfy the additional demand.
At that point, more nominal demand begins chasing a relatively constrained supply.
The result can be higher prices rather than proportionately higher real output.
That is the fiscal-inflation connection.
Deficits Can Also Keep Pressure on the Economy Longer
There is another reason persistent deficits matter.
A temporary fiscal expansion can be appropriate during a recession, emergency, war, financial crisis, or other period of severe economic weakness. The government can deliberately borrow and spend to prevent a collapse in demand.
The problem arises when emergency-style fiscal policy becomes structurally embedded after the emergency has passed.
If spending remains elevated while revenues remain insufficient to finance it, the government continues injecting fiscal demand into the economy.
The issue then becomes less about one year’s stimulus and more about the persistent fiscal stance.
That persistence matters for inflation expectations, interest rates, government borrowing costs, private investment, and the Federal Reserve’s policy response.
Government Spending Can Also Raise the Cost of Producing Things
Fiscal policy does not affect inflation only by stimulating demand.
Government policy can also affect the cost structure of the economy.
Government borrowing contributes to demand for credit. Large and persistent borrowing needs can put upward pressure on interest rates, particularly when private borrowers are competing for the same pool of financial resources.
Government spending can also increase demand for construction, engineering, defense production, transportation, technology, health care, energy, and other services.
When government becomes a very large buyer, private-sector buyers may have to compete for the same resources.
The result can be higher wages, higher input costs, higher financing costs, and higher prices.
In that sense, fiscal policy can influence both sides of the inflation equation:
More demand + constrained supply = greater price pressure.
The PPI Is an Important Warning Signal
This is why the August PPI deserves attention.
Producer prices are not consumer prices, and a single monthly PPI increase does not prove that fiscal policy caused the increase. Prices can move because of commodity markets, tariffs, energy shocks, supply disruptions, weather, transportation costs, exchange rates, or changes in margins.
But the PPI provides a useful window into the price pressures confronting businesses before those pressures are fully transmitted through the economy.
The July PPI data already showed that producer prices remained elevated: final-demand prices were up 4.7 percent over the year, while final-demand goods were up 6.5 percent and final-demand services were up 3.9 percent.
The August acceleration therefore raises a broader question about whether inflation is merely experiencing temporary disturbances—or whether the economy continues to contain structural forces capable of sustaining price increases.
Fiscal policy belongs prominently in that discussion.
Inflation Is a Policy Interaction, Not a Single-Agency Failure
It is tempting to divide economic policy into simple categories:
The Fed causes inflation.
Or:
Government spending causes inflation.
Or:
Tariffs cause inflation.
Or:
Corporations cause inflation.
Reality is considerably more complicated.
Inflation is an interaction among monetary policy, fiscal policy, supply, demand, expectations, financial conditions, international trade, energy markets, labor markets, and productivity.
But acknowledging complexity should not obscure responsibility.
If fiscal policy continually stimulates demand while monetary policy is attempting to suppress it, the two policies are working at cross-purposes.
And if the government repeatedly runs enormous deficits while the economy is operating near capacity, fiscal policy can become a persistent contributor to inflation rather than merely a temporary response to economic weakness.
The Fiscal Policy Question
The central economic question should therefore be expanded beyond:
“What is the Federal Reserve doing about inflation?”
It should also be:
“What is fiscal policy doing to inflation?”
That question is especially important when federal spending is growing faster than federal revenues and when deficits are measured in trillions of dollars.
The Federal Reserve can raise interest rates.
It can reduce them.
It can tighten.
It can ease.
But the Fed cannot balance the federal budget.
Congress and the Administration determine the government’s spending and taxation policies. As the Federal Reserve itself explains, fiscal policy is fundamentally the government’s tax-and-spending policy, while monetary policy is conducted independently by the central bank.
That division of responsibility matters.
If fiscal policy continually pushes aggregate demand upward, monetary policy may have to work harder to restrain it.
CBO’s projections already show the importance of this mechanism. In its 2026 baseline, net federal interest costs were projected at roughly $1 trillion, or 3.3 percent of GDP. CBO projected that interest costs would continue rising as a share of the economy over the following decade.
That does not mean interest expense itself automatically creates consumer-price inflation.
It means that debt service becomes another claim on federal resources and another component of federal spending that must ultimately be financed through taxes, borrowing, or reductions elsewhere.
The larger the debt burden becomes, the less fiscal flexibility policymakers have when the next recession, financial crisis, war, pandemic, or climate disaster arrives.
The Bottom Line
The August 2026 PPI report is more than another monthly inflation statistic.
It is a reminder that inflationary pressure remains embedded in the U.S. economy.
Some of that pressure comes from supply-side forces. Some comes from international events. Some comes from tariffs, energy markets, labor costs, and other factors.
But fiscal policy should not be treated as an innocent bystander.
Government spending is demand.
Deficits finance spending that exceeds current revenues.
Persistent deficits can sustain aggregate demand even when inflation is already elevated.
And when that fiscal expansion collides with constrained productive capacity, the result can be continued upward pressure on prices.
The United States therefore faces a policy problem that cannot be solved by monetary policy alone.
If policymakers want durable price stability, they eventually have to address not only the price of money, but also the size and composition of government spending, taxation, borrowing, and deficits.
The inflation debate should consequently move beyond the familiar question of whether the Federal Reserve is tightening enough.
The harder question is:
Is fiscal policy itself helping to keep the inflation fire burning?
In 2026, the evidence says that question deserves considerably more attention.
Coastal Erosion, Property Loss & the Uninsurable Coast
Nicolas Cage: Whole Sinkhole
On September 8, 2026, severe coastal erosion and high surf triggered by the aftermath of Hurricane Marie caused the driveway of Nicolas Cage’s $10.5 million beachfront mansion to completely collapse.
The resulting crater expanded to roughly 30 by 60 feet and plunged about 25 feet deep, swallowing the driveway, a construction-site portable restroom, and heavy concrete debris.
Powerful south swells, extreme high tides, and pounding waves from Tropical Storm/Hurricane Marie ate away at the coastline directly beneath the property.
The collapse ruptured a gas main, forcing utility crews to shut off natural gas along the street. Because the ground remained highly unstable, city officials declared a local state of emergency and red-tagged or ordered evacuations for roughly 30 surrounding homes. Fortunately, the home was unoccupied at the time, and no injuries were reported.
California’s Coastal Erosion
Climate change and coastal erosion are fundamentally reshaping California’s 1,100-mile coastline. What was once considered a slow-moving, long-term environmental shift has accelerated into a series of highly disruptive events, resulting in collapsing bluffs, shrinking beaches, and massive infrastructure vulnerabilities.
The severe impacts California is facing are driven by a combination of rising sea levels and intensifying ocean patterns.
1. Vanishing Beaches and the “Coastal Squeeze”
California’s famous sandy beaches are facing an existential crisis. The U.S. Geological Survey (USGS) estimates that 24% to 75% of California’s beaches could completely erode by the year 2100.
The Squeeze: Normally, a beach would naturally migrate inland as sea levels rise. However, much of California’s coast is experiencing a “coastal squeeze”: beaches are trapped between the rising ocean and human-made infrastructure such as seawalls, highways, and residential developments, leaving the sand nowhere to go.
Artificial Interventions: According to recent USGS satellite data, some Southern California beaches have artificially expanded, but this is entirely due to expensive human interventions, such as dredging and “beach nourishment” projects, rather than natural coastal resilience.
2. Sea Cliff Failures and Deadly Landslides
Roughly 70% of California’s coast is comprised of oceanfront bluffs and cliffs.
Increased Wave Attack: As baseline sea levels rise, waves strike the base of these cliffs more frequently and with greater force. This severely degrades their structural stability, triggering sudden and unpredictable cliff collapses and landslides.
Human and Property Risk: Bluff failures have turned deadly for beachgoers in areas such as Encinitas and San Francisco. They also pose an immediate threat to multi-million-dollar cliffside homes and vital transportation routes.
3. The “Triple Threat” of El Niño and Severe Storms
While climate change is steadily raising the global baseline sea level, seasonal weather anomalies can trigger immediate emergencies. Geomorphologists at the Scripps Institution of Oceanography warn that El Niño conditions create a devastating “triple threat”:
Elevated Ocean Height: El Niño patterns can temporarily push local sea levels up by an additional 6 to 13 inches. Combined with pre-industrial sea-level rise, this radically amplifies the baseline ocean height.
Powerful Swells: Stronger storms and intense wave energy eat away at protective sand berms at an accelerated rate.
Heavy Rain: Atmospheric rivers saturate coastal land, triggering landslides from the top down while waves batter the cliffs from the bottom up.
The compound effect of these forces was highly visible during recent extreme-weather events, which caused widespread flooding in Long Beach and massive coastal sinkholes in Malibu. Every 2 to 4 inches of sea-level rise effectively doubles coastal flood risks.
4. Compounding Economic and Ecological Damages
Infrastructure at Risk: The state’s Legislative Analyst’s Office estimates that $8 billion to $10 billion worth of existing property could be entirely underwater within the next few decades, with billions more at risk during high tides. Critical lifelines—including the Pacific Coast Highway and coastal rail links such as the Amtrak lines connecting San Diego to Los Angeles—frequently face service suspensions because of ground instability.
Ecological Degradation: California has already lost more than 60% of its historical coastal sand dune systems to development and erosion. This destroys critical habitats for native birds and mammals while removing the coastline’s natural buffer against storm surges.
Water Supply Risks: Rising tides put freshwater aquifers at risk of saltwater intrusion. Increased saltwater contamination in the Sacramento-San Joaquin Delta threatens the drinking-water supply for millions of Californians as well as adjacent agricultural land.
California’s Adaptive Strategy
In response, California passed legislation such as Senate Bill 272, requiring all local governments within the coastal zone to establish comprehensive sea-level-rise plans by January 1, 2034. Communities are forced to choose between “hard armoring”—building massive rock revetments and groins to hold back the sea—and “managed retreat,” the highly controversial process of moving structures and infrastructure entirely inland.
Florida Coastal Erosion
Florida is facing a systemic coastal real-estate crisis in which climate-driven physical erosion has collided with aggressive new legal and financial mandates.
The state is experiencing severe physical land loss, but the downstream financial impact—specifically skyrocketing condo fees, massive special assessments, and a plunging condo market—is reshaping the state’s housing economy.
Part 1: How Coastal Erosion Is Impacting Florida
Florida features a low-lying, highly vulnerable topography. Rising sea levels and climate-fueled hurricanes are causing severe coastline degradation.
Critical Erosion: The Florida Department of Environmental Protection has designated a majority of Florida’s coastline as facing “critical erosion risk.” Beaches and barrier islands are shrinking, eliminating natural buffers that protect buildings from storm surges.
Foundation Undermining: Storm surges and intense wave action systematically wash away sand beneath seawalls and structural slabs. Saltwater intrusion aggressively corrodes the steel rebar inside concrete foundations and parking garages, severely compromising structural integrity over time.
Boundary Shrinkage: Coastal erosion is shrinking the physical legal boundaries of private properties. By 2050, over 140,000 Florida properties are expected to be significantly altered by land loss.
Part 2: The Condo Crisis — Fees & Special Assessments
Historically, beachfront condo associations kept their Homeowners Association (HOA) fees artificially low by voting to “waive” reserve funding for long-term maintenance. The tragic 2021 collapse of Champlain Towers South in Surfside permanently ended this practice.
Following the disaster, Florida passed strict safety laws, including SB 4-D and subsequent updates such as HB 913, creating a financial perfect storm:
Mandatory Milestone Inspections: All buildings three stories or taller that reached 30 years of age—or 25 years if within three miles of the coast—were required to complete rigorous structural inspections. These inspections uncovered decades of hidden saltwater corrosion, concrete spalling, and foundation rot.
Structural Integrity Reserve Studies (SIRS): Associations must perform a SIRS to calculate the remaining lifespan of critical components such as roofs, foundations, and load-bearing walls.
The Ban on Waiving Reserves: Associations are strictly prohibited from waiving or underfunding reserves for structural items. They must collect the required cash.
The Financial Fallout
Six-Figure Special Assessments: Because buildings deferred maintenance for decades, unit owners are being hit with mandatory, one-time special assessments ranging from $50,000 to more than $400,000 per unit to pay for multi-million-dollar structural repairs.
Skyrocketing Monthly Fees: Regular monthly HOA fees have surged—sometimes by 20% to 50% in a single year—to cover ongoing reserve requirements and exploding commercial-property insurance premiums.
Surging Insurance Costs: Driven by storm damage and climate risk, many major private insurers have pulled out of Florida entirely. Condo buildings are forced onto high-cost, bare-minimum state-backed policies, adding thousands of dollars annually to an individual unit owner’s bottom line.
Part 3: Devastation of Real Estate Values
The financial strain of these assessments and fees has broken the economics of Florida condo ownership, resulting in a dramatic price correction along the coast.
The Mass Sell-Off: Fixed-income retirees and middle-class owners cannot afford a sudden $100,000 assessment or a doubling of their monthly dues. This has caused a massive influx of inventory as desperate owners try to unload their units before deadlines hit.
Evaporating Buyer Demand: Disclosures showing thousands of non-compliant buildings, paired with high risk, have terrified buyers. Buyers refuse to inherit pending six-figure structural repair bills, causing sales velocity to freeze.
Deep Price Disruption: According to market trackers, this massive supply glut and lack of demand has led to steep price drops for coastal condos. In stark contrast to single-family homes, aging coastal condos are seeing values plummet by 20% to 40%.
Coastal Gentrification: The ultimate trajectory is severe economic displacement. As middle-class owners are forced out, developers and wealthy buyers are buying up entire distressed buildings at steep discounts, either to demolish them or completely rebuild luxury projects out of pocket.
Australia Coastal Erosion
Over 250,000 Australian homes are at risk of coastal erosion, according to the “Rising Seas, Rising Bills” report published by the Climate Council on September 10, 2026.
Drawing on groundbreaking climate modeling from the University of Melbourne and the Australian National University, the report highlights the severe threat that rising sea levels and storm surges pose to Australia’s massive coastal population.
1. The Real Estate and Financial Risk
Properties Threatened: The report explicitly warns that more than 267,000 coastal properties—roughly a quarter of a million homes—are at risk of severe inundation and erosion damage by 2100.
The $855 Billion Economic Bill: Total economic losses are projected to hit at least $855 billion AUD by the end of the century. This includes $274.3 billion AUD in direct property damage, alongside $580.7 billion AUD in damage to farmland, nature reserves, and critical public infrastructure.
The Timeline: While 2100 is the benchmark for the worst damages, researchers stress that the economic shock waves will start crippling coastal real estate as early as 2040.
2. State-by-State Breakdown: Where Is Most Exposed?
The damage is not distributed evenly, with specific regions carrying extreme structural and financial burdens:
Queensland — 93,157 properties at risk: The worst-affected state by property count. The Gold Coast alone is officially named Australia’s most exposed urban area, facing a staggering $84.4 billion AUD in projected economic losses on its own.
New South Wales — 71,210 properties at risk: Communities in Northern NSW and the Central Coast are projected to experience far higher property losses than Greater Sydney.
Western Australia — 51,366 properties at risk: While it has fewer homes at risk than Queensland or New South Wales, Western Australia faces the highest overall financial loss, at $230.5 billion AUD, due to vast tracts of highly valuable coastal agricultural land that will be permanently lost to sea-level rise.
Victoria: Property losses are heavily concentrated in low-lying, densely populated urban areas around Melbourne’s Port Phillip Bay and the Yarra River.
3. The Uninsurable “Actions of the Sea”
Much like the condo crisis unfolding in Florida, Australia is facing a severe insurance reckoning.
The Exclusion Clause: Most standard private insurers in Australia explicitly exclude coverage for “actions of the sea.” This means regular ocean tidal flooding, steady coastal erosion, and sea-level rise are completely uncovered.
The Cost Burden: When a storm surge destroys a foundation or a cliff collapses, property owners will largely be forced to bear the multi-million-dollar stabilization or relocation costs entirely on their own. Experts warn that this will trigger massive drops in property values and result in “uninsurable” coastal ghost zones.
The Coast Is Becoming a Financial Fault Line
From California to Florida to Australia, coastal erosion is no longer simply a problem of disappearing sand or retreating shorelines. It is becoming a cascading climate-energy problem that reaches directly into property values, insurance markets, infrastructure, ecosystems, and household finances.
The Nicolas Cage sinkhole provides a dramatic example of how quickly coastal instability can turn an expensive piece of real estate into a dangerous hole in the ground. California demonstrates the growing physical vulnerability of beaches, cliffs, transportation corridors, and freshwater resources. Florida shows how physical climate risks can cascade into insurance crises, special assessments, and collapsing real-estate economics. Australia demonstrates how the same process can scale into a national financial exposure measured in hundreds of billions of dollars.
The underlying lesson is straightforward: coastal climate risk does not stop at the water’s edge.
As sea levels rise and extreme coastal events intensify, the physical loss of land can propagate through the economic system. Erosion undermines structures. Structural damage increases repair costs. Repair costs increase insurance premiums and assessments. Insurance becomes unavailable or unaffordable. Properties lose value. Buyers disappear. Communities face declining tax bases and increasingly expensive infrastructure protection.
What begins as coastal erosion can therefore become a cascading economic feedback.
Climate energy is hitting the coast—and increasingly, it is hitting the balance sheet.
Tonight’s homework assignment: How much land do I need for my own shit? (AKA The Eat n’ Poop Experiment)
Both literally and figuratively.
This is an experiment I’ve been working on for years. And when you actually try to do it—when you have to think about where your food comes from, where your water comes from, and what happens to everything that comes out of you—you gain a very different perspective.
And yes, sometimes the experiment even comes down to a question like: Do I eat the worm, or don’t I?
Food and water are big problems.
But getting rid of what comes out of you can be an even bigger problem.
I’ve been meeting quite a few other people who are “doing it”—trying to become more self-sufficient, reduce their dependence on centralized systems, and figure out what is actually required to sustain a human being.
So I thought a good test for me would be to reevaluate the whole concept at two scales:
Macro. And micro.
Tonight is micro night.
How many acres do you need for your own shit?
A commonly cited homesteading rule of thumb is roughly 2–5 acres per person for a fairly self-sufficient setup—but that’s not a universal number. It depends enormously on your diet, soil, climate, water supply, livestock, energy needs, and how much of your waste you can safely recycle.
And that’s where it gets interesting.
Food production: You might be able to produce a substantial amount of plant food on a fraction of an acre. Add grains, livestock, dairy, or meat, and the land requirement can increase dramatically.
Water: You need a reliable source of potable water—and potentially enough watershed, recharge area, storage, or infrastructure to keep that supply reliable.
Waste: This is the part people tend to overlook.
Your sewage system doesn’t just need a place to put sewage. It needs soil, treatment capacity, separation from groundwater and drinking-water sources, and enough suitable land for the system to function safely.
In Pennsylvania, for example, wastewater land-treatment systems can require significant separation distances from private drinking-water wells. That means the geometry of the property can matter almost as much as the number of acres.
At the right scale—and with proper treatment—some things we call “waste” become inputs into another system.
So tonight I’m starting at the smallest possible unit:
One human.
How much land does one human actually need to provide food, water, and a safe place to put—or recycle—everything that comes out of them?
How many acres do you need for your own shit?
Then we’ll scale it up.
Because four people don’t necessarily require four times the land. And four people sharing a watershed, a food system, and a waste-treatment system creates an entirely different problem.
Tonight: micro. Next: macro.
MACRO
Tonight’s homework assignment: How much land do we need for all our shit?
AKA: The “Who Will Fend for Themselves?” Experiment
Last night was micro: How much land do I need for just me?
Tonight is macro: How much land do we need for me, my family, and company?
In two different experiments—one in New Zealand and one in Pennsylvania—families have been trying to find the answer.
Interestingly, both case studies arrived at a remarkably similar result: if you can optimize the use of roughly 100 acres, you can support about 20 people, although toward the lower end of what we would consider a modern standard of living.
And that’s when the bigger problem became evident.
As part of our long-term planning, we had to determine who would be allowed to come live with us in a crisis such as climate change.
There were eight of us. We figured our parents would need to be among the first to come. That added six, bringing us to 14. Then we started adding siblings, their partners, and their children. We quickly exceeded 25.
So the real question became:
Who gets invited?
And who is left to fend for themselves?
That sounds like an abstract thought experiment when you have plenty of land, food, water, and energy. It becomes a very different question when those resources have a hard limit. And as climate change accelerates—and the number of grandchildren continues to grow—these questions are no longer really about “future generations.”
They are about our own descendants.
They are the people who may actually have to confront the new realities we are leaving them.
That’s the part of the experiment I find hardest to calculate.
Not how many people the land can sustain.
But who gets to be one of them.
Notes
In New Zealand, Ganantchian Claire said:
Human waste is a very easy “problem “. Composting is super easy, safe, and valuable. Water of course depends where you are. Stream, or roof water are easy gravity fed, groundwater requires energy to bring it up. Food, acreage… as you say, depends entirely on your soil and climate. My opinion is a cow or a couple of goats are the easiest quickest way to get food security as milk covers all your needs. My experience is plants are great, but unreliable as crops can be devastated in a flash by pests or weather events. To avoid starvation, I would never give up my milking cow. One could actually survive with no land at all just walking a cow along the roadsides. A bit extreme, but why not?
In Pennsylvania, USA, I replied:
Nice! Thanks. “Real food” is the hardest thing in my environment as well, especially in the winter. When I say real food, I mean exactly what you said—food security. Eating vegetation is not something I can do for any extended period, and winter makes that particularly difficult.
Though your winters get cooler, I assume they aren’t quite as extreme as Pennsylvania’s, are they?
This becomes particularly relevant when we get to the “macro” experiment.
You also raise another important point with your example of “walking a cow along the roadsides.” In our experiment, we set it up as a game. One of the rules is that you can’t use other people’s land.
That, too, depends on where you live—and on what is considered public property versus private property. Ultimately, I think this is a debate that is likely to intensify as climate migration itself intensifies.
As for waste management, this also appears to be heavily dependent upon location.
In Pennsylvania, the largest long-term problem is waste management, followed by food, then water. But if you don’t manage waste properly, water quickly becomes your biggest problem. Contamination of drinking-water supplies from inadequate or poorly located waste management has been a long-term issue.
Traditionally, you needed at least 10 acres if you could not “perc” your lot.
Collecting rainwater isn’t necessarily a viable solution either. There simply isn’t enough precipitation in many locations across the continental U.S. And in several states, there are legal restrictions on collecting or impeding the flow of water unless you specifically own the water rights.
That’s what makes this experiment so interesting.
The answer isn’t just “How much land do I need?”
It’s where is the land, what can it produce, where does the water come from, and where does the poo go?
How many acres do you have available and how many people do you think you could sustain?
Ganantchian replied:
Interesting conversation. It highlights one of the biggest obstacles to self sufficiency is regulations.
We have 100 acres of land. 25 acres retired to native bush and wetlands, 50 acres very steep of very poor quality soil, 25 acres of which have been planted in poplars. And 25 acres of gently slopping with average quality soil.
I reckon we would comfortably feed 20 people in a localised system ie no fossil fuels or synthetic fertilisers use. Because of the poor inherent quality of our soil, manure from animals and us is the most valuable resource. If composted properly, it is safe to use around fruit and nut trees, which we have planted over 100 over the farm.
Our climate is very mild and with usually good rainfall although we do get drought. Rainwater is vital for drinking as I drunk water from our creek as an experiment and got quite sick Although it’s fine when boiled.
But again, the biggest hurdle is having to pay land rates. Which at the moment the livery horses cover. They do take up 90% of our grazing land… so currently the farm can only sustain 1 or 2 people… All because we are forced to fund Growth in the region, new roads, infrastructure for cars which I loathe, airport extensions which I vowed to never use again…
Hence it is very difficult to prepare for the unfolding multi crisis while the authorities are impeding our progress.
I responded:
Yes, very interesting indeed. Our macro experiment was intended to demonstrate how many people we could sustain on similar acreage. The result was almost identical.
Two families of four acquired 135 acres. About 35 acres were “public rights of way,” and another 20 acres were steep slopes and other unlivable acreage. Some of those 35 acres consisted of three streams, so potable water wasn’t a problem. One of the streams originated from a spring on the property and tested safe for drinking.
We had a cattle and chicken farmer adjoining the property. We exchanged our tillable acreage, about 65 acres, for him to grow feedstock in exchange for him raising a couple of cows and some chickens for us. There were also fish, small game, deer, and other protein sources. That left us about 15 acres for vegetables.
We did not fully develop and complete the land-management plan because it was not economical at the time. However, we did a thorough plan for being able to survive the winters. Solar panels offered the best and cheapest energy source. Small hydroelectric systems installed in the streams could add additional wattage. In addition, a small windmill could pump water up the steep slope to a small reservoir, which could be used as a “battery” for hydropower when the sun wasn’t shining.
Sewage ended up being the limiting factor.
Without sewage, we could sustain about 38 people. With sewage, that number dropped to about 25. The three streams were great for eating and drinking, but they limited where we could build sewage treatment systems without having rainwater runoff contaminate the drinking water and food sources.
The end result was a self-sustaining property of roughly 100 acres that could provide enough food, water, and energy for 20–25 people.
That is when the bigger problem became evident.
As part of our long-term plan, we had to determine who would be allowed to come live with us in a crisis such as climate change. There were eight of us. We thought our parents would need to be the first to be saved. That was an additional six, bringing the total to 14. If all of our siblings, their mates, and kids were included, we quickly exceeded 25.
So that became the bigger issue.
Who would be on the list of people invited versus the list of people to fend for themselves?
As climate change accelerates and the number of grandchildren grows, these questions are no longer about future generations. They are about our own descendants being forced to confront the new realities they will inherit.
She asked:
did you give up?
Yes, I equally feel that I only can provide for close loved ones. It might become different if our local community wakes up. But so far, most of my neighbors think the crisis is a distant worry for the next generation. I’m more than happy to open my gardens to as many people as possible. As long as they are on the same page, and putting in the hard yards.
People seem to think we have time. But the systems you are describing take years to put into place. 50 years ago is when humanity should have gone down that track.
Now… we barely have time to prepare for our small family groups…
Makes me ponder if I’ve done it in the right place as the local population (walking distance) is about 2000 people. 99% of whom rely entirely on being fed by supermarkets and takeaways…
I replied:
No, we didn’t give up. We achieved the goals of the study.
I was the climatologist, economist, and estate planner, as well as the land-management executive. What became obvious was that the physics, science, and logic of a crisis weren’t going to be the real problem.
The security of the infrastructure from outside threats—and the internal trust required to manage the “financial trust fund”—were going to be the larger crisis within the crisis.
One would hope that a crisis would bring us—humanity—together.
Unfortunately, the opposite appears to be true.
Fear and greed are inherent problems that get amplified in a crisis.
That was probably the most important thing we learned from the experiment.
On September 4, 2026, President Donald Trump escalated his ongoing pressure campaign against the Federal Reserve following a stronger-than-expected August jobs report. The unexpectedly strong labor-market data increased market expectations that the Federal Reserve could raise interest rates as was already expected.
Trump responded with a sweeping threat on Truth Social: if the Federal Reserve does not lower interest rates, he said he would stop trading with countries with which the United States runs a trade deficit. He demanded that the Fed “get smart” and “BE PATRIOTS for a change,” while arguing that the United States should have the lowest interest rate in the world.
As one prominent economist associated with the Wharton School put it, this is insane.
The problem begins with a fundamental misunderstanding of the role of the Federal Reserve.
The Federal Reserve Must Remain Independent
The Federal Reserve’s operational independence exists for a reason. Congress established a framework that gives the Fed significant independence in conducting monetary policy while holding it accountable to its statutory objectives of maximum employment and stable prices.
This independence is not an inconvenience to be overcome by political pressure. It is one of the foundations of monetary credibility.
A central bank that is perceived as responding directly to the political demands of the president risks losing the credibility that allows it to control inflation expectations and maintain confidence in the currency. Federal Reserve officials have repeatedly emphasized that institutional credibility is essential to effective monetary policy.
That matters enormously for the United States because the dollar remains the world’s dominant reserve currency. The Federal Reserve reported in 2026 that the dollar remains the most widely used currency in foreign-exchange transactions and cross-border payments and the leading currency in official reserve holdings. That position is supported not only by the size of the American economy and the depth of U.S. financial markets, but also by confidence in U.S. institutions.
The independence of the Federal Reserve is therefore not merely an institutional technicality. It is part of the infrastructure supporting confidence in the dollar.
The Trade-Deficit Fallacy
The second problem is the premise that a U.S. trade deficit is inherently a loss for America.
It isn’t.
A trade deficit means that the United States imports more goods and services than it exports. But that is only one side of the accounting identity. The other side is the flow of foreign capital into the United States.
The Federal Reserve Bank of Dallas explains that trade deficits are the mirror image of foreign capital inflows. They can reflect strong domestic investment, fiscal expansion, global savings flows, and the unique role of the U.S. dollar as the world’s dominant reserve currency.
In other words, foreigners do not simply “take” something from America when they sell us more goods than they buy from us. The dollars ultimately flow back into American financial assets, businesses, real estate, government securities and other investments.
That capital finances American consumption and investment.
The Congressional Research Service similarly notes that the trade deficit allows Americans to consume more goods than they produce and allows the United States to finance more investment with foreign capital. It can therefore benefit U.S. consumers and borrowers, including the federal government.
The trade deficit is not automatically a sign of economic weakness. In many circumstances, it is a consequence of America’s economic strength, investment opportunities, capital markets and the global demand for dollar-denominated assets.
Trying to eliminate a trade deficit by simply eliminating trade would therefore attack the symptom rather than the underlying economic relationships.
Threatening Higher Inflation to Force Lower Rates
The third problem is perhaps the most fundamental.
If the objective is to reduce borrowing costs, threatening policies that undermine confidence in the Federal Reserve, disrupt international trade and increase inflationary pressure is precisely the wrong direction.
The president’s demand for lower short-term interest rates does not determine long-term borrowing costs. Bond investors ultimately price Treasury securities based on their expectations for inflation, economic growth, fiscal conditions, monetary policy and institutional credibility.
If investors begin to believe that monetary policy is being subordinated to political demands, they can demand greater compensation for holding dollar-denominated debt.
That means higher—not lower—long-term interest rates.
The irony is profound: an attempt to force interest rates lower can produce the very conditions that push market rates higher.
The Market’s Immediate Message
The financial markets reacted to both the jobs report and Trump’s threat, with futures markets increasing the implied probability of a September rate increase while spot-market interest rates rose almost immediately.
The broader message from the bond market is important.
Markets do not simply obey political demands.
They price risk.
And when political pressure raises questions about the future independence of monetary policy, investors can respond by demanding higher yields and a larger risk premium.
That raises borrowing costs throughout the economy—from the federal government to corporations to households.
The Economic Contradiction
The contradiction is difficult to miss. The stated objective is lower interest rates. But forcing the Federal Reserve to cut rates through political pressure could undermine confidence in the institution.
The stated objective is to eliminate trade deficits. But eliminating trade with deficit countries would also eliminate the imports that American consumers and businesses purchase and disrupt the foreign capital flows associated with those trade relationships.
The stated objective is to strengthen the American economy. But deliberately creating uncertainty around monetary policy and international trade risks increasing inflation, raising borrowing costs and reducing investment.
The United States did not become the world’s largest economy by treating every trade deficit as a financial loss. Nor did the dollar become the world’s dominant reserve currency because American monetary policy was subordinated to short-term political demands.
The strength of the American economic system rests on something much larger: deep and liquid capital markets, open international commerce, property rights, the rule of law, institutional credibility and confidence in the stability of the dollar.
Those are assets that can take generations to build. They can be damaged much faster.
The central question is therefore not whether interest rates should be higher or lower at any particular moment.
The question is whether monetary policy will be determined by economic conditions and the Federal Reserve’s statutory mandate—or by political ultimata.
That distinction matters because the price of undermining confidence in America’s economic institutions is ultimately paid not by the Federal Reserve, but by Americans through higher inflation, higher borrowing costs, reduced investment and a less reliable dollar.
We’ve conducted case studies on the use of AI in a wide variety of environments, including everything from the dynamics of nonlinear chaotic systems to songwriting and musical production.
All produced similar results—benefits to the environment, the economy, and society.
For instance, the climate education and graphics used for this post are based on this scientific paper as well as the publicly accessible version.
If I had created them manually, the costs in time, labor, energy, and resources would have been substantial. Using AI, the direct dollar cost to me was effectively zero, the graphics were generated in about a minute, and the estimated natural-resource cost was roughly $0.067 per image.
By comparison, producing similar graphics through traditional methods could easily have cost hundreds of dollars when accounting for labor, software, revisions, and associated natural-resource use. Mathematically, the AI-generated version required approximately 0.005% of those resources—just five thousandths of one percent of the traditional cost. These savings are equivalent to a reduction in environmental impact.
The benefits—in both environmental savings to the planet through reduced physical-resource use and in the ability to produce and distribute education—far outweigh the costs.
Most importantly:
The only effective way to stop the acceleration of climate change is through the reduction of fossil-fuel combustion.
However, the most likely way of reversing the trajectory of climate change is through people using AI to develop previously unthought-of methods and technologies that can fundamentally change how we produce, consume, and manage resources—and potentially remove greenhouse gases from the atmosphere.
Anti-Science and Technology Rhetoric
Unfortunately, the lack of science and technology literacy is at the root of many of society’s problems. Anti-AI opinions are ironically very similar to the anti-science rhetoric used by climate-change deniers.
Climate-change deniers tend to have little, if any, experience as climate scientists. They often show signs of impaired executive function: the brain’s ability to plan, analyze, and think abstractly. This makes processing complex or nuanced information nearly impossible, fostering an aversion to science, mathematics, and logic. Their thinking becomes rigid, emotionally driven, and black-and-white, leaving them highly susceptible to political propaganda, conspiracy theories, and fear-based messaging. Unable to reason critically or tolerate uncertainty, they cling to misinformation and reject rational discourse—no matter how much evidence is presented.
The same holds true for anti-technology opinions expressed in public. The ill-informed individual has likely never used AI in the role of a climate scientist. Scientists train their own highly specialized AI assistants. AI is artificial SUPPLEMENTAL intelligence. This is not how the ordinary individual usually interacts with AI.
In my case, I have spent years developing multiple specially trained “lab assistants” that have learned from scores of our own work. When Sidd and I started, our work had to be done on Ohio State computers and supercomputers that Sidd helped create. Things like “a floating decimal” were, and still are, a significant problem. Problems that needed solving would take months or years to process. The amount of energy spent on computation was enormous compared with today.
Things have changed for the better.
This year, we were able to establish third-derivative behavior across multiple climate indicators—extremely important developments in climate science that confirm that the acceleration rate of climate change is itself accelerating. This work was completed within four months. Historically, I would have been unlikely to complete this work in my lifetime if it were not for AI.
In the meantime, the United States has gone extremist in anti-science and anti-technology ideology, much to the detriment of science and scientists in the U.S. In fact, we are now working on bringing up our own AI computer using Chinese technology. It will be running on DeepSeek. The single computer will do the work of what used to take at least a dozen servers to accomplish, at a fraction of the price. It will not be run in a data center. It will not be costing society anything. In fact, it will be greatly benefiting society and helping to solve the climate crisis.
So, the next time you want to voice your opinion about AI, do your homework first. Start by getting at least a master’s-level education in climate science. Then spend years training your AI assistants. After completion, I would be happy to discuss AI with you.
California Wildfire Insurance: Who Pays When the Forest Burns?
California is confronting a difficult new reality: increasingly destructive wildfires are no longer just an environmental problem. They are becoming a financial, legal, insurance, and property-risk problem that reaches directly into the lives of homeowners, utilities, insurers, investors, and taxpayers.
California lawmakers and Governor Gavin Newsom have reached a landmark compromise on Senate Bill 492 (SB 492) to reform the state’s wildfire liability system. At the same time, the California Board of Forestry and Fire Protection has finalized strict new “Zone Zero” landscaping requirements for homeowners in high-risk areas.
Together, these actions address two sides of the wildfire problem:
Who pays when utility equipment starts a catastrophic fire—and what can homeowners do to reduce the probability that their property burns?
1. Utility Liability and Wildfire Compensation
After intense negotiations, state lawmakers finalized a compromise version of SB 492 that removes the liability protections sought by California’s investor-owned utilities.
The “Fast-Pay” Program
The legislation establishes an expedited compensation process intended to get money to wildfire victims more quickly. Compensation can cover property losses, pain and suffering, while victims retain the right to pursue litigation and conduct legal discovery.
No Subrogation Limits
One of the most consequential provisions concerns subrogation—the process through which insurance companies seek reimbursement from utilities when utility equipment is responsible for a fire.
Lawmakers rejected efforts to restrict this process.
That matters because a wildfire does not end when the flames are extinguished. The financial losses can continue for years through insurance claims, litigation, infrastructure replacement, and potential utility liabilities.
If utility equipment ignites a catastrophic fire, the utility can remain financially exposed to enormous claims.
2. “Zone Zero”: Moving Fire Prevention Onto the Property
California is also attacking wildfire risk at the individual-property level.
The California Board of Forestry and Fire Protection has adopted what are being described as first-in-the-nation wildfire safety requirements focused on the immediate area surrounding homes in high-risk locations.
The central concept is Zone Zero—the first five feet surrounding a structure.
The 5-Foot Rule
Homeowners in designated high-hazard areas must remove combustible materials, wooden sheds, and most vegetation within five feet of their homes.
The goal is straightforward:
Create a defensible noncombustible space immediately around the structure.
What Can Remain?
Some vegetation is permitted.
Lawns, flowers, and non-woody plants shorter than 18 inches can remain under specified conditions, provided they are not directly beneath a roofline.
Trees are permitted only when branches are maintained at least five feet away from structures.
Nearly 2 Million Existing Homes
The requirements apply immediately to new construction and will be phased in over five years for nearly 2 million existing homes.
That represents a major shift in wildfire policy.
California is effectively treating individual homes as components of the larger wildfire-risk system. Homeowners who fail to comply with Zone Zero requirements could face fines or other penalties—and, depending on the terms of their insurance policy and applicable law, noncompliance could also jeopardize their wildfire coverage.
3. The Insurance Problem
The insurance industry has raised concerns about inconsistencies in the new rules.
Representatives, including the Personal Insurance Federation of California, have objected to provisions allowing local governments to establish their own exceptions.
From an insurer’s perspective, inconsistent standards create a difficult problem:
How do you accurately price wildfire risk when neighboring jurisdictions can apply different rules to otherwise similar properties?
Insurance depends on the ability to estimate risk.
As wildfire risk becomes more geographically variable—and as losses become more severe—the ability to accurately price that risk becomes increasingly important.
Utilities face potentially enormous liabilities. Insurers face increasingly expensive claims. Homeowners face higher premiums and stricter mitigation requirements. Investors must reassess utility risk. Governments may ultimately face pressure to intervene when private insurance markets become unable or unwilling to absorb catastrophic losses.
4. The Market Is Repricing Wildfire Risk
Over the weekend, California lawmakers finalized the compromise version of SB 492, stripping out the liability protections that utility companies had been seeking.
The market reaction has been immediate, with utility stocks—including Edison International and PG&E—coming under significant pressure as investors reassess the potential financial exposure.
The underlying issue is bigger than one bill or one wildfire.
Investors are being forced to reconsider a fundamental question:
What is the true financial liability of operating electrical infrastructure in a climate where extreme wildfire conditions are becoming more dangerous—and how will that liability affect utility rates?
The consumer will foot the bill.
Over the past decade, catastrophic wildfires have cost California’s major electric utilities more than $45 billion through direct settlement payouts, insurance subrogation claims, and historic bankruptcy costs.
California’s strict legal doctrine of “inverse condemnation” adds another layer of financial exposure. Under this doctrine, electric utilities can be held responsible for property damage caused by their equipment even when the utility was not negligent.
The result is a massive financial burden concentrated among California’s largest utilities.
But utilities do not ultimately absorb these costs in isolation. Billions of dollars in wildfire liabilities, infrastructure hardening, insurance costs, legal settlements, financing costs, and risk premiums become part of the economic cost of providing electricity.
And those costs eventually flow back to the ratepayer.
When wildfire risk increases, the cost of electricity infrastructure increases with it:
More extreme fire conditions → greater utility liability → higher insurance and financing costs → billions in wildfire settlements and mitigation spending → higher utility costs → higher electricity rates.
California’s wildfire crisis is therefore becoming an insurance problem, a utility problem, and ultimately a consumer problem.
The question is no longer simply who is legally responsible when a power line starts a fire?
The larger question is:
Who ultimately pays for the growing cost of operating an electrical grid in a climate of escalating wildfire risk?
The consumer will foot the bill.
Climate Energy Becomes Financial Energy
This is what climate change increasingly looks like at the ground level.
It is not simply a hotter atmosphere or a longer fire season.
Climate energy moves through interconnected systems:
The physical climate system becomes an economic system.
And eventually, that system reaches the homeowner.
California’s wildfire response is therefore becoming something much larger than a debate about fire suppression.
It is becoming a test of whether insurance markets, utility companies, homeowners, investors, and governments can absorb the financial consequences of escalating climate-amplified wildfire risk.
From Biodiversity to Monoculture: The Socio-Economic-Ecological Feedback Loop
Climate change is often described as a problem of rising temperatures, but temperature is only one expression of the additional energy entering the Earth system.
That energy moves through the atmosphere, hydrologic cycle, soils, vegetation, ecosystems, agriculture, forests, and human economies. As each system responds, it can alter the conditions experienced by the others.
This creates feedback loops.
A recent investigation by the Center for Investigative Reporting found that glyphosate is being sprayed in California forests at record levels. The U.S. Forest Service, timber companies, and other land managers use glyphosate after wildfire or timber harvest to suppress competing vegetation and improve the establishment of commercially valuable conifers.
At first glance, this may appear to be a straightforward forestry practice: kill competing plants, plant trees, and accelerate forest recovery.
But viewed through the lens of climate-system dynamics, it raises a much larger question:
What happens when our response to climate disruption further simplifies the ecosystems we depend upon for resilience?
Climate Energy Is Changing the Recovery Environment
Western forests are already experiencing a combination of higher temperatures, increasing atmospheric moisture demand, changing precipitation and snowpack, declining soil moisture, drought stress, and increasingly severe wildfire.
A forest can experience increasing stress for years without an obvious transformation. Then a threshold can be crossed.
Trees die.
Seed sources disappear.
Regeneration fails.
Shrubs and grasses occupy the landscape.
The ecosystem begins transitioning from one state to another.
As the paper explains, under moderate emissions scenarios, up to 40% of western conifer forests could convert to shrubland or grassland by 2100.
That is not simply forest damage.
It is ecosystem conversion.
And once we recognize that distinction, the economics of post-fire forest management look different.
The Economics of Reforestation
After a major wildfire, rapidly growing shrubs, grasses, ferns, and deciduous vegetation can compete with planted conifer seedlings for water, nutrients, and sunlight.
From a timber-production perspective, that competition is a problem.
Glyphosate provides an efficient way to remove it.
The Forest Service has used herbicide treatments as part of regeneration efforts because suppressing competing vegetation can improve the early survival and growth of desired seedlings. Forest research acknowledges that this is one reason herbicides have been used in reforestation.
The economic objective is therefore understandable:
But that is not necessarily the same objective as:
restore biodiversity → restore ecological function → increase climate resilience.
Those two objectives can overlap.
They can also conflict.
A Forest Is Not a Tree Farm
The distinction matters because a forest is not simply a collection of trees.
A functioning forest contains an enormous biological network:
multiple tree species
shrubs
grasses
flowering plants
fungi and mycorrhizal networks
insects and pollinators
birds
mammals
reptiles and amphibians
soil organisms
decomposers
streams and wetlands
genetic diversity
Each component participates in the functioning of the ecosystem.
When glyphosate is applied to eliminate “competing” vegetation, those plants are competitors only from the perspective of the desired crop.
From the perspective of the ecosystem, they may be food, shelter, habitat, soil cover, pollinator resources, firebreaks, nutrient sources, or participants in water and carbon cycling.
This creates a fundamental difference between restoration and production.
Production asks:
How efficiently can we produce the desired commodity?
Ecological restoration asks:
How effectively can we restore the biological relationships that make the ecosystem resilient?
Biodiversity Is Infrastructure
Biodiversity is often treated as an aesthetic or conservation issue.
It is much more than that.
Biodiversity is a form of ecological infrastructure.
Different species respond differently to drought, heat, insects, disease, fire, and changing precipitation. A diverse ecosystem therefore contains multiple biological responses to disturbance.
If one species performs poorly, another may survive.
If one food source disappears, another may remain.
If one plant cannot regenerate under new climatic conditions, another may occupy the available ecological niche.
This is one reason biological diversity can provide resilience.
A simplified ecosystem has fewer alternatives.
A diverse ecosystem has more.
That distinction becomes increasingly important as climate variability increases.
From Biodiversity to Monoculture
The problem becomes more obvious when forestry is compared with modern industrial agriculture.
Large-scale agriculture often relies on monocultures: enormous areas devoted to a single crop or a very small number of genetically similar crops. Monoculture creates economic efficiencies. Machines can plant, fertilize, spray, harvest, and transport a standardized product at enormous scale. But biological simplification creates vulnerabilities.
A pest that specializes in the crop has an enormous continuous food supply. A disease can spread rapidly through genetically similar plants. Soil nutrients can become depleted. Pollinator and insect diversity can decline. Herbicide and pesticide dependence can increase.
The economic system becomes increasingly dependent upon external inputs to maintain productivity.
The result can be a feedback loop:
biodiversity declines → ecological resistance declines → pests and disease become more consequential → chemical inputs increase → biodiversity declines further.
This is not an argument that all monoculture agriculture inevitably fails.
It is an argument that efficiency and resilience are not the same thing.
The same distinction applies to forestry.
The Forest Monoculture
When post-fire management suppresses naturally regenerating vegetation in order to establish commercially desirable conifers, the landscape can move toward a forest plantation rather than a naturally regenerating forest.
A plantation can contain thousands of trees and still possess considerably less biodiversity than the ecosystem it replaced.
This creates a dangerous semantic trap. We see trees. We call it a forest. But ecological function depends upon far more than tree cover.
A plantation of one or a few commercially valuable species can look green from above while functioning very differently from a diverse forest.
And in a warming climate, that distinction can become critical.
Ecosystem Conversion Versus Reforestation
This is where the concept of ecosystem conversion becomes important.
Suppose a severe wildfire destroys a mature conifer forest.
The original ecosystem does not necessarily return.
Under the warmer and drier conditions described in my Western U.S. Woodlands paper, grasses and shrubs may become better adapted to the post-fire environment than the trees that previously occupied it.
The second pathway is not simply allowing the ecosystem to respond to its new climate. It is imposing an economic land-use objective upon that response. That distinction should be explicit in public policy.
The Carbon Question
There is another important distinction. A green landscape is not necessarily equivalent to the forest that existed before. Grasslands and shrublands photosynthesize and absorb carbon.
So do plantations.
But carbon uptake is not the same thing as carbon storage.
A mature forest contains carbon in:
trunks
branches
roots
dead wood
forest soils
long-lived biomass
The Ecosystem Conversion paper makes this distinction explicitly:
carbon uptake ≠ carbon storage capacity
and
positive carbon flux ≠ preservation of the previous carbon stock.
A plantation may therefore satisfy a narrow definition of reforestation while failing to reproduce the carbon reservoir, biodiversity, hydrology, and ecological complexity of the original forest.
The Glyphosate Feedback
This brings us back to glyphosate. The current controversy is not simply about a herbicide. It is about the interaction between climate disruption, economic incentives, land management, biodiversity, and ecosystem resilience.
The emerging feedback looks something like this:
Climate warming
↓
Heat + drought + atmospheric moisture demand
↓
More severe wildfire
↓
Loss of mature forest
↓
Economic pressure to recover timber production
↓
Herbicide use to suppress competing vegetation
↓
Reduced vegetation diversity
↓
Simplified forest structure
↓
Greater dependence on managed inputs
↓
Potentially reduced ecological resilience
↓
Greater vulnerability to future climate disturbances
This does not mean glyphosate necessarily causes every subsequent step.
The feedback is systemic.
The larger point is that a management strategy designed to optimize one component of a complex system can unintentionally weaken other components.
The Scientific Evidence Must Be Independent
There is also a legitimate question about the evidence used to evaluate glyphosate. The recent investigation found that a study heavily relied upon by the Forest Service in assessing glyphosate safety was subsequently retracted after concerns about Monsanto’s involvement in the research process.That does not establish that every use of glyphosate is unsafe. It does establish why the underlying evidence should be independently reviewed.
When government policy determines what chemicals can be sprayed across public landscapes, the scientific foundation for those decisions should be exceptionally transparent.
Public land requires public confidence. And public confidence requires independent science.
From Wildfire Recovery to a National Policy
The issue also has a national economic dimension.
On February 18, 2026, President Donald Trump signed an executive order titled “Promoting the National Defense by Ensuring an Adequate Supply of Elemental Phosphorus and Glyphosate-Based Herbicides.”
The order invokes the Defense Production Act and directs federal action to ensure an adequate domestic supply of glyphosate-based herbicides. That places glyphosate within a much larger economic framework involving agriculture, forestry, chemical manufacturing, supply chains, and national security.
The feedback becomes:
climate disruption → increased agricultural and forestry stress → greater dependence on chemical intervention → greater economic importance of chemical production → stronger incentives to maintain chemical availability.
The system becomes self-reinforcing.
The Bigger Problem: Optimizing the Wrong Variable
Climate change forces us to rethink what we mean by efficiency. A system can be economically efficient while being ecologically fragile. A monoculture can produce enormous quantities of a commodity while containing very little biological diversity. A plantation can produce timber while failing to reproduce the ecological functions of a natural forest. A landscape can be covered in green vegetation while holding substantially less carbon than the forest it replaced. And a post-fire intervention can accelerate tree planting while simultaneously simplifying the ecosystem that must survive the next climate shock.
The central question is therefore not:
How quickly can we replace the trees we lost?
It is:
What kind of ecosystem will survive the climate that is coming?
The Resilience Test
Climate change is increasing the importance of resilience.
A resilient ecosystem does not necessarily maximize production under ideal conditions.
It maintains function when conditions become abnormal.
That means diversity matters.
Species diversity.
Genetic diversity.
Structural diversity.
Age diversity.
Habitat diversity.
Landscape diversity.
Biological diversity is effectively a portfolio of responses to uncertainty.
Industrial systems tend to reduce that diversity because standardization creates efficiency.
Climate instability does the opposite.
It increases the value of diversity.
That creates one of the central contradictions of the climate era:
The more unstable the climate becomes, the more we need ecological diversity—and the more economic pressure we may face to simplify ecosystems for efficiency.
Climate Energy Is Hitting the Whole System
This is ultimately what I mean by How Is Climate Energy Hitting You?
Climate energy does not stop with a thermometer reading or a measurement of atmospheric carbon dioxide. It moves through the entire coupled human-Earth system.
Heat changes water demand.
Water stress changes forests.
Forest stress changes wildfire.
Wildfire changes ecosystems.
Ecosystem disruption changes economic decisions.
Economic decisions change land management.
Land management changes biodiversity.
Biodiversity changes resilience.
And declining resilience feeds back into the next disturbance.
The resulting system is not a collection of unrelated environmental problems. It is a coupled socio-economic-ecological feedback system in which changes in one component propagate through the others.
Wildfire becomes an economic loss.
Economic loss creates pressure for rapid recovery.
Rapid recovery creates demand for herbicides, machinery, labor, and planted timber.
Those interventions alter ecosystems.
Altered ecosystems influence water, biodiversity, soil, carbon storage, and future fire behavior.
Government policy can then reinforce the economic system that produced the intervention in the first place.
The feedback can therefore become self-reinforcing.
The challenge is to recognize when a short-term economic solution becomes a long-term ecological feedback.
That distinction becomes especially important when an ecosystem crosses a threshold. Restoring the trees may not be the same thing as restoring the forest.
And once biodiversity has been converted into monoculture, replanting the landscape does not necessarily recreate the ecosystem that was lost.
Climate change is not simply changing the weather.
It is changing the decisions we make about the world around us—and those decisions can become feedbacks that determine how resilient that world remains.
North Texas: Drought, Wildfire, Evacuation, Water Scarcity, Livestock Liquidation, Crop Failure
The Ross Fire: Climate Energy on the Ground
The Ross Fire has exploded across more than 50,000 acres of North Texas, triggering mandatory evacuations, school closures, and a major emergency response. Driven by triple-digit heat, exceptionally low humidity, strong winds, and severe drought, the fire is exhibiting extreme behavior and was only about 5% contained as of August 25.
The fire began in Palo Pinto County near Highway 180 and Ross Watson Road and has pushed rapidly northeast toward southern Jack County. Firefighters have reported flames reaching as high as 100 feet, making direct attacks extremely dangerous. Crews have therefore relied heavily on bulldozers and aerial support.
Evacuations and Community Disruption
Mandatory evacuations have been ordered for portions of southern Jack County, including areas near and east of Bartons Chapel and along County Road 2210 toward Highway 281.
An evacuation center has been established at the Twin Lakes Recreation Center on Highway 59 in Jacksboro.
The fire is also disrupting education. On August 25, Perrin CISD canceled all classes, while Jacksboro ISD delayed the beginning of the school day by two hours.
This is more than a wildfire. It is a demonstration of how climate energy moves through a coupled human-environment system: heat dries vegetation, drought removes water from the landscape, wind accelerates fire spread, and communities are forced to evacuate.
Texas Is Drying Out
The Ross Fire is occurring within a much larger regional drought emergency. Drought conditions across Texas have deteriorated rapidly, with approximately 77% of the state experiencing drought. Nearly 200 counties across Texas and Oklahoma have implemented active outdoor burn bans because of elevated fire danger.
A second significant brush fire has also been reported farther south in Hamilton County near Evant, forcing localized evacuations north of Highway 84.
The important point is that wildfire is not an isolated event. Fire is the visible expression of an increasingly dry and heat-loaded landscape.
When extreme heat, low humidity, depleted soil moisture, dry vegetation, and high winds occur simultaneously, their effects are not merely additive. They reinforce one another.
Climate Energy Is Reshaping Texas Agriculture
The same climate pressures driving wildfire are disrupting Texas agriculture and the cattle industry.
Texas agriculture is confronting a convergence of prolonged drought, historic heat, declining water availability, and increasingly volatile precipitation. Together, these stresses are changing the economics of farming and ranching.
The result is not simply a bad growing season.
It is structural disruption.
The Cattle Industry Under Pressure
Shrinking Herds
Depleted water supplies and increasingly parched rangelands have contributed to a major contraction in Texas cattle operations. The Texas cattle herd has fallen from approximately 13.1 million head to about 12 million.
The national beef-cow inventory has also fallen to its lowest level in decades.
Forced Liquidation
When stock ponds empty and forage disappears, ranchers face an increasingly difficult choice: purchase expensive supplemental feed or sell their cattle.
For operations already under financial pressure, purchasing enough hay to maintain a breeding herd may be impossible. Cattle are therefore being sent to auction and slaughter earlier than planned.
Higher prices do not restore the lost water or forage.
The economic consequences therefore continue long after the drought itself begins to ease.
Beef Supply Chains Under Stress
With fewer cattle available, livestock prices are rising sharply. The contraction in cattle inventories is also putting pressure on meat processors.
When there are not enough animals moving through the system, processing facilities can become economically unsustainable. Plant closures then reduce processing capacity and increase the vulnerability of the remaining supply chain.
Climate energy is therefore moving from the atmosphere to the pasture, from the pasture to the rancher’s balance sheet, and from the rancher’s balance sheet to the consumer’s grocery bill.
Crop Agriculture Under Extreme Heat and Drought
Texas is also confronting severe challenges to crop production.
Cotton Crop Failures
Texas is the nation’s leading cotton-producing state, but extreme heat and drought have caused widespread crop stress, crop failures, and abandoned fields.
Sustained triple-digit temperatures can interfere with flowering and reproductive development, reducing yields even when plants survive.
Heat Stress and Water Scarcity
As temperatures rise, crops lose water more rapidly through evapotranspiration.
At the same time, declining soil moisture and groundwater availability make irrigation increasingly difficult and expensive.
This creates another feedback:
Higher temperatures → greater atmospheric demand for water → faster soil drying → greater irrigation demand → declining water availability → higher agricultural costs.
The atmosphere is effectively pulling water out of the agricultural system faster.
Pests and Disease
Climate disruption is also changing the biological environment in which crops are grown.
Changes in temperature and seasonal conditions can allow pests and diseases to expand their ranges, survive through seasons in which they previously could not, or reproduce more rapidly.
Threats including cotton jassid, rice delphacid, and pasture mealybug illustrate how agricultural climate risk extends beyond drought and heat.
Farmers are increasingly confronting a moving target: the climate conditions under which today’s agricultural systems evolved are changing faster than the systems themselves can adapt.
Adaptation: Fighting Back Against Climate Energy
Texas farmers and ranchers are not simply waiting for conditions to improve. Many are experimenting with strategies designed to make agricultural systems more resilient.
Regenerative Ranching
Some ranching operations are adopting rotational and multi-paddock grazing systems designed to improve soil structure, maintain living root systems, and increase water infiltration.
Healthy soils can store substantially more water than degraded soils. Improving soil organic matter and root systems can therefore provide a buffer against drought by allowing more rainfall to infiltrate and remain available to plants.
Adaptation cannot stop the atmosphere from warming.
But it can increase the amount of climate stress an agricultural system can absorb before it fails.
Carbon Farming
Managed grasslands can also store carbon in soils while improving soil health and water retention.
Carbon farming therefore has the potential to provide multiple benefits: improved pasture productivity, greater drought resilience, healthier soils, and additional revenue through carbon markets where those markets are viable.
Statewide Disaster Planning
Texas is also attempting to improve its institutional response to increasingly complex agricultural hazards.
The Texas Department of Agriculture has established the Texas Agriculture Disaster Task Force to coordinate responses to threats including wildfire, freezes, drought, and biosecurity emergencies.
That kind of planning recognizes an increasingly important reality:
Climate disasters do not occur one at a time.
A drought can increase wildfire risk.
A wildfire can destroy forage.
Heat can intensify drought.
Drought can reduce crop yields.
Crop failures can increase food prices.
Water shortages can force livestock liquidation.
And all of these pressures can occur simultaneously.
The Bigger Picture: Climate Energy Is Cascading Through the System
The Ross Fire is therefore more than 50,000 acres of burning vegetation.
It is one visible manifestation of a larger climate-energy cascade.
Drought → depleted forage and water → cattle liquidation → smaller herds → constrained beef supplies → higher prices
These are not independent problems.
They are connected expressions of the same physical system.
Climate change adds energy to the atmosphere. That additional energy intensifies the hydrologic cycle, increases atmospheric demand for water, amplifies heat extremes, and changes the timing and intensity of precipitation.
The result is increasing volatility: longer dry periods interrupted by more intense rainfall, greater heat stress, rapidly drying landscapes, and wildfire conditions that can emerge with extraordinary speed.
How Is the Climate Energy Hitting You?
In North Texas, it is hitting as drought, wildfire, evacuation, water scarcity, livestock liquidation, crop failure, and rising agricultural costs.
The Ross Fire makes the process impossible to ignore.
The fire is burning on the landscape.
The drought is draining the landscape.
And the climate energy driving both is increasingly reaching the farm, the ranch, the grocery store, and the household.
Climate change is not merely changing the weather.
It is changing the systems that depend upon the weather.
Central England is providing a very tangible demonstration of what climate energy looks like when it moves through a real landscape.
Not as an abstract temperature anomaly. Not as a number on a graph.
As heatwaves. Drought. Wildfires. Crop losses. Water restrictions. And then sudden, intense rainfall arriving on ground that has been baked hard by weeks of exceptional heat and dryness.
This is hydroclimatic whiplash: the rapid swing between one extreme hydrological condition and another.
Five Heatwaves — and Counting
Summer 2026 has already delivered a remarkable sequence of heatwaves across the United Kingdom. By August, the country had experienced a fifth heatwave, with the latest episode producing temperatures above 38°C in parts of England. Fire chiefs described the conditions as a sustained and escalating wildfire risk.
The Met Office has indicated that 2026 is on course to become the UK’s hottest summer on record, with the outlook particularly strong for England and Wales.
This isn’t simply five isolated hot spells.
Repeated heatwaves mean the landscape has less opportunity to recover between events. Soil moisture is depleted. Vegetation dries out. Rivers and reservoirs fall. Crops reach critical developmental stages under heat stress. Livestock experience thermal stress. And every subsequent heatwave starts from a more vulnerable baseline.
The energy isn’t disappearing when the thermometer comes back down.
It has already been transferred into the land, atmosphere, vegetation, water system and human infrastructure.
Drought: The Landscape Runs Out of Water
On July 29, the UK government officially declared drought across seven areas of England, including large portions of central, eastern and southern England. The government described much of the region as experiencing “flash drought,” driven by exceptionally low rainfall combined with high temperatures. Rivers were running low, farmers were harvesting early, wildfire risk was increasing and millions of people were facing water restrictions.
The situation continued to deteriorate.
By August, more than two-thirds of England had entered drought conditions. Reservoir storage had fallen to 69% and was declining, while more than 27 million people were living under water restrictions.
Official data for August 7–13 showed England receiving only 6% of its long-term average rainfall for the month to that point. Reservoir storage had fallen to 65.9%, 13.8 percentage points below the long-term average, while five reservoirs were classified as exceptionally low.
That is what a drought looks like when climate energy works through the water cycle.
The problem isn’t merely that it hasn’t rained.
It is that extraordinary heat increases evaporation and atmospheric demand for moisture while rainfall fails to replenish the system.
Then Comes the Deluge
And this is where the story gets particularly interesting.
After weeks of heat and dryness, rainfall doesn’t necessarily mean the drought is over.
When soils become severely dried and hardened, intense rainfall can run across the surface rather than infiltrating efficiently. Heavy showers and thunderstorms can therefore produce flash flooding even while the broader region remains in drought.
That apparent contradiction is becoming increasingly important.
England can simultaneously experience:
Drought underground.
Flooding on the surface.
Low reservoirs.
Overflowing drains.
Dry vegetation.
Rapid runoff.
This is hydroclimatic whiplash.
Recent forecasts and observations have already raised concerns that heavy rainfall following the prolonged drought could generate surface-water flooding without providing enough sustained precipitation to restore depleted soil moisture, groundwater and reservoirs.
A few hours of intense rain is not equivalent to weeks or months of accumulated rainfall.
The water has to be absorbed, stored and retained.
If it arrives too quickly, much of it simply moves downstream.
Wildfire: When the Landscape Becomes Fuel
The drought has also transformed the wildfire environment.
By August 10, firefighters in England and Wales had already responded to 966 wildfires in 2026, including 185 during the first ten days of August alone. July was the busiest month on record for wildfire incidents.
By August 16, the number had reached 1,132 wildfires across the UK—already exceeding the entire 2025 total, with months of the fire season still remaining.
The government eventually issued a national emergency alert warning of a very high wildfire risk across England and Wales.
And this was no longer simply a countryside problem.
In Stourbridge in the West Midlands, a grass fire spread rapidly into residential areas. Nineteen homes were destroyed and another 18 were damaged. Nearly 40 properties were affected.
The lesson is brutally simple:
When the countryside becomes tinder-dry, the boundary between wildfire and urban fire can disappear remarkably quickly.
Agriculture Takes the Hit
Perhaps the most consequential impact will not be visible in the flames.
It will be visible in the harvest.
The Energy and Climate Intelligence Unit’s August analysis found that the 2026 UK arable harvest was on track to become the worst on record. Initial yield estimates were already below the 10-year average for wheat, spring barley and oats.
Then the forecast deteriorated further.
Updated figures released August 14 put UK arable production at just 18.5 million tonnes, below the previous estimate of 19.5 million tonnes and approximately 1.35 million tonnes below the previous record-low harvest in 2020. ECIU estimated that the 2026 harvest could therefore become the smallest on record.
This is what happens when climate energy arrives at the wrong time.
Heat during crop development.
Drought during critical growth periods.
Accelerated maturation.
Reduced soil moisture.
Poor grass growth.
Heat-stressed livestock.
And then, potentially, heavy rainfall arriving after crops have already suffered.
The damage is not necessarily one spectacular event.
It is the accumulation of energy transfers occurring faster than agricultural systems can adapt.
The Climate Energy Doesn’t Disappear
This is the part of the story I think we frequently miss.
When the heatwave ends, we tend to assume the problem has ended.
It hasn’t.
The energy has moved.
Heat increases evaporation.
Evaporation removes water from soils and vegetation.
Dry vegetation becomes fuel.
Drought lowers river flows and reservoirs.
Wildfires transfer enormous amounts of energy into the atmosphere and destroy ecosystems and property.
Then storms can transfer atmospheric moisture into intense rainfall.
That rainfall can become runoff and flooding rather than useful groundwater recharge.
The system keeps moving.
One extreme can help create the conditions for the next.
Central England is not experiencing one climate problem.
It is experiencing a cascade.
Five heatwaves.
Official drought.
Record-low rainfall.
Depleted water resources.
Extreme wildfire conditions.
Homes destroyed.
Agricultural losses.
And now the possibility of intense rainfall and flash flooding arriving before the underlying drought has been repaired.
That is the important distinction.
Climate change isn’t simply about making today’s weather “hotter.”
It is about changing the amount of energy available to the climate system and altering how quickly that energy can move between the atmosphere, land, water and living systems.
The result can be greater volatility.
Longer extremes.
More rapid transitions.
And increasingly destructive combinations of events.
Central England is showing us what that looks like.
The question isn’t whether the climate energy is hitting us.
It is.
The question is:
Where does it go next?
And what happens when the next transfer arrives before the system has recovered from the last one?
Although it’s fine when boiled.
